Promote the Progress

Yesterday, the Patent Office published a Final Rule indicating that it will now levy an annual “practitioner maintenance fee” on all patent practitioners registered to practice before it.  In my earlier post on the rule, I expressed my initial thought as “it’s about time.”  Here’s the explanation I promised.

The Patent Office is, in essence, running parts of a professional bar association for its members.  It administers the system for entering the association, maintains the membership rolls, and oversees the disciplinary system.  Each of these is a vital component of a self-regulating professional association; the absence (or malfunction) of any one of which would endanger the legitimacy of the association.

Oddly, though, patent practitioners have never had to pay the costs of running these functions.  Since taking and passing the patent bar and being admitted to practice, I haven’t paid a single nickel to any association that oversees enrollment and discipline (though I’ve paid many nickels to AIPLA and other groups).  Nor has any other patent practitioner who has remained in good standing (unless they wanted a certificate of good standing, perhaps with the ’suitable for framing’ $10 upcharge).  In essence, we’ve enjoyed several benefits of having a professional association without having to pay for any of them.

What’s worse – we’ve actually managed to pass the costs associated with running our “association” onto fee-paying customers of the Office.  Certainly someone has been footing the bills for all these years.  We all know the Office is able to float its own boat, so it seems fair to assume that the Office of Enrollment and Discipline has been operating on patent fees paid by applicants.  Indeed, the final rule notes that, through the new fee, “USPTO will recover the costs associated with these activities from the practitioners instead of the public in general.”

I’d much rather see an independent federal patent bar association oversee these functions (and these fees), but such a beast is not likely to be born anytime soon and we, as professionals, cannot shirk our obligation to pay for these functions while we wait for one to arise.  So, in the meantime, I support the Office in its decision to take this bold step.

But, with that said, I have a a few concerns about this new direction.

First, the Office needs to provide complete and accurate accountings for income raised by the fee and expenses paid with the collected monies.  Unfortunately, the Office cannot, without an asterisk, promise practitioners that the fees we pay will always be used only for OED purposes.  It is possible that, in the future, these fees would be used for other Office expenses unrelated to maintaining the membership, or even other non-Office and/or non-patent purposes.  On this point, it is disturbing that the Office summarily dismissed the fee diversion comments received in connection with the “practitioner maintenance fee” draft rule in “don’t worry about it” fashion, especially when juxtaposed with the government’s argument in Figuerora v. United States (the patent fee diversion challenge).  The oral argument from Figuerora is enlightening:

Judge Newman – “Is the government’s position that…Congress could appropriate the entire [patent fee] income…and allow the backlog to continue to increase in the patent office if, in fact, [that's] what Congress decided to do?”

Government counsel: “Yes, your Honor. It’s our position that Congress’ legislation is not limited by the preamble’s promotion language on which the Appellant relies.”

Second, the Office needs to provide legitimate avenues through which practitioners can provide meaningful input on the enrollment and discipline systems.  Policies, procedures and personnel should all be subject to some degree of input from practitioners.  The patent statute gives the Office significant discretion in connection with the establishment and operation of these systems (see 35 U.S.C. s. 2(b)(d), the same section cited by the Office for the authority to impose the practitioner fee).  Now that a fee is being exacted, the Director should make it a priority to exercise that discretion in a manner that opens these systems to the bar.

Lastly, the Office should work with Congress to reduce patent fees paid by applicants by the amount of money that will be collected through the new practitioner maintenance fee.  The amount is minimal, I know, but it’s the principle that matters.  The final rule indicates that patent applicants have been paying for the enrollment and discipline systems for all these years.  If the new fee is designed to pay for these services going forward, the assessment on applicants should be removed.

Tags: USPTO

This entry was posted on Tuesday, November 18th, 2008 at 6:15 am and is filed under USPTO, regulation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.